In a preliminary assessment of the quake's impact on Japan's real estate markets, CBRE found that demand in the industrial market could temporarily lift, but the long-term effects on industrial rents were still unclear.
CBRE's Asia Pacific and Japan research team also concluded:
■Tokyo office rents may soften amid the uncertain economic environment.
■Tokyo prime retail rents are expected to remain flat.
■Japanese investors and funds are likely to lead the recovery in transaction volumes, supported by domestic banks.
Nick Axford, CBRE's head of research, Asia Pacific, said it was too early to assess the full impact of the quake on Japan's real estate market.
''On the investment side, we anticipate that Japanese investors and funds will lead the recovery in transaction volume,'' he said.
''Though some overseas investors have adopted a 'wait-and-see' attitude, others are viewing this is as a possible purchasing opportunity.''
According to the report, the Japanese government estimated infrastructure losses at ¥16 to ¥25 trillion ($A189 to $A295 billion).
Economic growth would be a ''tug of war'' between rebuilding efforts and stagnant activity in the earthquake area of Tohoku, decreased production in other regions caused by production halts in Tohoku, and weakened consumer confidence.
The CBRE report said public finances were a concern, with Japan's net public debt at 120 per cent of gross domestic product and a national budget deficit of 10 per cent. However, ''Japan's strong sense of civil service, underscored by hard-working patient people with a strong will to rebuild, will fuel restoration efforts'', it said.
Mr Axford said office buildings in major cities near the affected area suffered relatively minor damage, while some bayside locations in Tokyo and Chiba faced liquefaction, shifting ground levels and infrastructure damage.
Demand for prime office space was expected to weaken while companies assessed the economic outlook and potential impact on business performance, he said.
''Prime office rents could dip by as much as 5 per cent while the lull in occupier activity persists.''
Longer term, prime office buildings were likely to benefit from occupiers placing greater emphasis on a building's earthquake resistance capabilities.
On the industrial front, Mr Axford said, two trends had emerged in greater Tokyo: disaster-affected companies were leasing short-term warehouse space - filling long-time vacancies, and demand for large-scale logistics facilities had risen.
''If repairs to damaged manufacturing bases in northern Japan are delayed, tenants may consolidate existing facilities in greater Tokyo,'' he said. ''However, if short-term demand fails to translate to longer-term requirements, there is unlikely to be any significant benefit to rents.''
He said high street retailers in metropolitan Tokyo suffered minimal physical damage, but were affected by consumers spending less and limited operating hours due to potential power cuts. Some retailers, especially foreign apparel and luxury brands, temporarily moved headquarters to Osaka or shut down completely. Japanese retailers, on the other hand, tended to stay put. ''By late April, all but a few retailers reopened for business,'' he said.
Mr Axford said rents would remain flat or soften slightly in the coming six months, but would begin to recover as the nuclear situation was brought under control and tourism began to recover.
On the investment market, most transactions scheduled to close in March and April were unaffected, but some deals were postponed or cancelled. This was mainly due to lenders taking a more cautious stance after the earthquake.''Overseas funds are adopting a 'wait-and-see' attitude as they re-evaluate the outlook for the real estate sector,'' Mr Axford said.
■Tokyo prime retail rents are expected to remain flat.
■Japanese investors and funds are likely to lead the recovery in transaction volumes, supported by domestic banks.
Nick Axford, CBRE's head of research, Asia Pacific, said it was too early to assess the full impact of the quake on Japan's real estate market.
''On the investment side, we anticipate that Japanese investors and funds will lead the recovery in transaction volume,'' he said.
''Though some overseas investors have adopted a 'wait-and-see' attitude, others are viewing this is as a possible purchasing opportunity.''
According to the report, the Japanese government estimated infrastructure losses at ¥16 to ¥25 trillion ($A189 to $A295 billion).
Economic growth would be a ''tug of war'' between rebuilding efforts and stagnant activity in the earthquake area of Tohoku, decreased production in other regions caused by production halts in Tohoku, and weakened consumer confidence.
The CBRE report said public finances were a concern, with Japan's net public debt at 120 per cent of gross domestic product and a national budget deficit of 10 per cent. However, ''Japan's strong sense of civil service, underscored by hard-working patient people with a strong will to rebuild, will fuel restoration efforts'', it said.
Mr Axford said office buildings in major cities near the affected area suffered relatively minor damage, while some bayside locations in Tokyo and Chiba faced liquefaction, shifting ground levels and infrastructure damage.
Demand for prime office space was expected to weaken while companies assessed the economic outlook and potential impact on business performance, he said.
''Prime office rents could dip by as much as 5 per cent while the lull in occupier activity persists.''
Longer term, prime office buildings were likely to benefit from occupiers placing greater emphasis on a building's earthquake resistance capabilities.
On the industrial front, Mr Axford said, two trends had emerged in greater Tokyo: disaster-affected companies were leasing short-term warehouse space - filling long-time vacancies, and demand for large-scale logistics facilities had risen.
''If repairs to damaged manufacturing bases in northern Japan are delayed, tenants may consolidate existing facilities in greater Tokyo,'' he said. ''However, if short-term demand fails to translate to longer-term requirements, there is unlikely to be any significant benefit to rents.''
He said high street retailers in metropolitan Tokyo suffered minimal physical damage, but were affected by consumers spending less and limited operating hours due to potential power cuts. Some retailers, especially foreign apparel and luxury brands, temporarily moved headquarters to Osaka or shut down completely. Japanese retailers, on the other hand, tended to stay put. ''By late April, all but a few retailers reopened for business,'' he said.
Mr Axford said rents would remain flat or soften slightly in the coming six months, but would begin to recover as the nuclear situation was brought under control and tourism began to recover.
On the investment market, most transactions scheduled to close in March and April were unaffected, but some deals were postponed or cancelled. This was mainly due to lenders taking a more cautious stance after the earthquake.''Overseas funds are adopting a 'wait-and-see' attitude as they re-evaluate the outlook for the real estate sector,'' Mr Axford said.
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